ND Public Services Commission- DAPL

Public Service Commission

State of North Dakota

COMMISSIONERS

Julie Fedorchak
Randy Christmann
Brian P. Kalk

Executive Secretaiy February 1 1 , 2016

Darrell Nitschke 3

600 East Boulevard, Dept 408
Bismarck, North Dakota S8S0S-0480
Web: www.psc.nd.gov
E-mail: ndpsc@nd.gov
Phone: 701-328-2400
ND Toll Free: 1-877-245-6685
Fax: 701-328-2410
TDD: 800-366-6888 or 711

The Honorable Al Jaeger
North Dakota Secretary of State
Secretary of the Emergency Commission
State Capitol

Bismarck, North Dakota 58505

RE: Request approval to assess Dakota Access, LLC additional fees.

Dear Secretary Jaeger:

The Public Service Commission requests approval from the Emergency Commission to
assess Dakota Access, LLC additional fees reasonably necessary for the completion of the
PSC’s evaluation of transmission facility corridor and transmission facility rouge evaluation.

A more detailed explanation of this request is presented in the attached Emergency
Commission Request Part E. Narrative.

Executive Secretary

Attachment: SFN 02580

c: w/attachment: Stephanie Gullickson, OMB

Allen Kundson, Legislative Council
Public Service Commissioners
PSC Public Utilities Division
PSC General Council

150 PU-1 4-842 Filed: 2/11/2016 Pages: 4

Letter enclosing request to Emergency Commission

Public Service Commission

Darrell Nitschke

® REQUEST TO EMERGENCY COMMISSION

STATE OF NORTH DAKOTA

Submit original and 7 copies to Secretary of State

STATE OF NORTH DAKOTA
< 7 SFN 02580 (9-2007)

For reference, see North Dakota Century Code, Chapter 54-16

Date

Department Number

Department Name

2/10/2016

^ 408

Public Service Commission

Authorized Department

A™'™/ / /

Name of Contact Person

Telephone Number

MSA

Josh Gallion

701-328-4020

PART A: BACKGROUND

/■I • Was any portion of this request presented to the last legislative session? (If yes, please explain legislative action in narrative) □ Yes 0 No

^/ls any portion of this request a new program? (If yes, please explain in narrative) Q Yes 0 No

3. Will the legislature be asked to continue this program in the next biennium? Q Yes 0 No

PART B: FTE

4. Will this program require an increase in authorized FTE? . □ y es 0N

If yes, how many? I

PART C: INCREASE IN APPROPRIATION LINE ITEM

7. Will this program require state general fund money for a match in this biennium?

If yes, estimate the amount of general fund money needed and explain its source in the narrative

8. Will this program require state general fund money in the next biennium?

If yes, estimate the amount of general fund money needed in the next biennium r

9. Source of Funds for increased spending authority (check applicable box) _ ...... „ . „ , .. . .

□ Federal Q State Contingency Funds 0other P aid b _^ applicant, Special Funds w / Cont.nu.ng Appropriation

10. Is this a pass-through from another agency? QYes 0No If yes, from which agency?

1 1 . If this program is federally funded, will the legislature be asked to continue it if federal funds are no longer available? .

If yes, estimate the amount of general fund money needed in the next biennium f -

12. Specify below the line item to be increased and the amount of the increase. *■"

Line Item

. □ Yes 0No

I

□ Yes 0No

QYes 0No

PART E: NARRATIVE (attach separate sheets if necessary)

PARTE. NARRATIVE

Pursuant to North Dakota Century Code section 49-22-22(2), the Public Service Commission (the "PSC")
hereby requests approval of the Emergency Commission to assess Dakota Access, LLC additional fees
reasonably necessary for the completion of the PSC's evaluation of transmission facility corridor and
transmission facility route evaluation and designation process.

North Dakota Century Code section 49-22-22 requires an application fee for the recovery of expenses
associated with the PSC's evaluation and designation process for siting energy conversion and
transmission facilities. The Applicant must remit an application fee based on the dollars to be invested
in the proposed project not to exceed one hundred thousand dollars. N.D.C.C. § 49-22-22(l)(f).

Dakota Access filed applications with the PSC for a certificate of corridor compatibility and a route
permit concerning approximately 358 miles of 12-, 20-, 24-, and 30-inch diameter crude oil pipeline and
associated facilities in Mountrail, Williams, McKenzie, Dunn, Mercer, Morton, and Emmons Counties,
North Dakota; and terminals near Stanley in Mountrail County, near Tioga in Williams County, near
Epping in Williams County, near Trenton in Williams County, near Watford City in McKenzie County, and
near Johnsons Corner in McKenzie County. Accompanying the applications, Dakota Access filed an
application fee of $100,000 for the evaluation and designation process. The total estimated cost of the
proposed project in North Dakota is $1.41 Billion.

The North Dakota Energy Conversion and Transmission Facility Act (North Dakota Century Code chapter
49-22) authorizes the PSC to determine that the location, construction, and operation of jurisdictional
energy conversion and transmission facilities will produce minimal adverse effects on the environment
and the welfare of the citizens of North Dakota. The PSC utilizes third-party construction inspection
services to ensure the project is constructed in compliance with the siting laws (North Dakota Century
Code chapter 49-22), siting rules (North Dakota Administrative Code article 69-06), and the
Commission's Order. The PSC has selected and retained a third-party inspector for the project, following
a request for qualifications process. The third-party vendor's bid is $108,258 for this project and will be
paid from the application fee.

With the original $100,000 application fee and an additional $100,000 approved by the Emergency
Commission, the PSC would be able to cover the expenses incurred to date of $50,672 for legal fees,
public notice and outreach, an administrative law judge, and expenses associated with three hearings;
the additional outstanding legal fees expected of approximately $2,200; the $108,258 for third-party
inspection services; and $38,870 for use in the event that it is necessary to re-open and amend the case
and to address subsequent legal requirements.

The statute contemplates that an application fee may not cover the entire cost of processing some siting
applications, and therefore, provides that applicants shall pay additional fees as are reasonably
necessary for completion of the siting process with Emergency Commission approval. In requesting
additional fees for completion of the transmission siting process, the Applicant shall in no event be
assessed under North Dakota Century Code section 49-22-22(1) and any additional fees pursuant to
North Dakota Century Code section 49-22-22(2) an amount to exceed ten thousand dollars for each one

million dollars of investment in the proposed transmission facility. In the current case, this provides that
the total amount of application fees assessed to Dakota Access shall not exceed $14.1 Million due to the
total estimated costs of $1.41 Billion.

Based upon the extensive nature of this project, the PSC requests approval to assess an additional
$100,000 siting application fee. Dakota Access has been informed of this need and has informed the
Commission that it has no objection to the additional fees requested. As required by statute, the PSC
will refund any portion of the fee that exceeds expenses incurred.